Term Loans

In 2017, Lonza issued term loans of EUR 450 million and USD 489 million tranches carrying floating interest rates and repayable in 2020 and 2022 (EUR 225 million and USD 245 million at the first maturity date), respectively. The net proceeds of the two term loan tranches received in 2017 totaled CHF 955 million.

Syndicated Loan

In 2017 Lonza signed a syndicated loan with a consortium of banks on the following terms: Credit facility of CHF 700 million, of which CHF 259 million was used as of 31 December 2018 (2017: CHF 230 million), due 2023, at floating interest rates (based on LIBOR). The syndicated loan agreement contains a financial covenant that is based on Lonza’s net debt/EBITDA ratio. The Group was released in 2018 from this covenant as the net debt/EBITDA ratio fell below a defined threshold.

Others

Other non-current debt comprises industrial revenue bonds of USD 187 million issued by governmental institutions in the United States (repayable in 2020, 2022, 2025, 2030 and 2047) and a bank loan of USD 200 million, repayable in 2024. The private placement of senior notes amounting to USD 158 million with certain institutional investors was repaid in 2017.

Acquisition Bridge Financing

The 2017 acquisition of Capsugel was financed with a combination of debt and equity financing. Lonza had committed debt financing (bridge financing) for the full acquisition amount of USD 5.5 billion from Bank of America Merrill Lynch and UBS, of which USD 1,457 million was raised in July 2017. The net proceeds of the bridge financing received in 2017 amounted to CHF 1,380 million after considering up-front fees of CHF 19 million (an additional CHF 18 million was paid in 2016). The bridge financing was fully repaid in 2017 and consequently the related up-front fees of CHF 37 million were recorded in the income statement.